John Marretta - Page 8

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          respondent must show:  (1) An underpayment exists; and (2)                  
          petitioner intended to evade taxes known to be owing by conduct             
          intended to conceal, mislead, or otherwise prevent the collection           
          of taxes.  Sadler v. Commissioner, supra at 102.  “Where fraud is           
          determined for each of several years, respondent’s burden applies           
          separately for each of the years.”  Temple v. Commissioner, T.C.            
          Memo. 2000-337, affd. 62 Fed. Appx. 605 (6th Cir. 2003).  If                
          respondent establishes that some portion of the underpayment is             
          attributable to fraud, the entire underpayment shall be treated             
          as attributable to fraud, except with respect to any portion of             
          the underpayment that the taxpayer establishes is not                       
          attributable to fraud.  Sec. 6663(b).                                       
          I.  The 1994 Tax Year                                                       
               Respondent asserts that petitioner’s conviction for an                 
          attempt to evade or defeat tax under section 7201 collaterally              
          estops him from challenging respondent’s determination that                 
          petitioner is liable for civil fraud penalties under section 6663           
          for the 1994 tax year.  A conviction for an attempt to evade or             
          defeat tax pursuant to section 7201, either upon a guilty plea or           
          upon a jury verdict, conclusively establishes fraud in a                    
          subsequent civil tax fraud proceeding through the application of            
          the doctrine of collateral estoppel.  DiLeo v. Commissioner, 96             
          T.C. 858, 885 (1991), affd. 959 F.2d 16 (2d Cir. 1992); Frey v.             
          Commissioner, T.C. Memo. 1998-226.                                          






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